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E.U. Prime Brokers Hit by New Rules on Collateral Reuse

E.U. Prime Brokers Hit by New Rules on Collateral Reuse

Posted on Thu, Jun 14, 2018 @ 7:30

By Luke Clancy
June 13, 2018, Risk

New European record-keeping rules for funds could make the rehypothecation of securities collateral more difficult and raise operational costs for prime brokers, as well as conflicting with the standard practices of depositary institutions, custody experts say.

The new rules set out the duties of depositaries – custody institutions that also monitor and audit investment funds – with regard to client assets where safe-keeping is delegated to third parties, including prime brokers.